With congress deadlocked on the debt ceiling, President Obama used today’s ceremony announcing (although not fully revealing) a 2025 CAFE standard to contrast fuel economy standard negotiations with the chaos on Capitol Hill. ABC quotes the President saying

You are all demonstrating what can happen when people put aside differences. These folks are competitors. You’ve got labor and business. But they decided: We’re going to work together to achieve something important and lasting for the country. So when it comes to tackling the deficit or it comes to growing the economy… the American people are demanding the same kind of resolve, the same kind of spirit of compromise, the same kind of problem solving that all these folks on stage have shown. They’re demanding that people come together and find common ground… That’s what I’m fighting for. That’s what this debate is all about. That’s what the American people want.

But getting a bunch of auto CEOs in the same room to agree on one 2025 “number” is a lot easier than breaking a political deadlock: after all, the standard could well be changed during the 2017 review period, so nobody is agreeing to anything set in stone past 2016. And the saber-rattling continues, as industry consultants predict doom for the post-2016 period, when the truck standard hits the same 5% annual improvement rate as cars. Besides, Volkswagen and Daimler are the equivalent in this situation of holdouts in the congress, refusing to appear at today’s ceremony and protesting the proposed standard in the media. And when the final rules is announced, this coalition of exemplary compromise could fall apart, as the Sierra Club threatens

As the administration moves forward to finalize the standard, it is critical that they avoid weakening loopholes and giveaways for the industry, and we look forward to working with them to ensure the strongest 2025 fuel efficiency and pollution standards possible to benefit American families and workers.

Defections on the right and left? Continued saber rattling? No concrete agreement yet in any case? Sounds a lot like congress, actually…

20 Comments on “Quote Of The Day: Nobody Compromises Like CAFE Negotiators Edition...”

Not a single one of these people are going to have to live with the real-world implications of this political charade. The CEOs will have flown off (on their “corporate jets”) to wherever it is they retire to; Obama will be a second Herbert Hoover, quietly in exile or buried in a non-thinking subsidized “Think Tank.” The industry will scramble to make this regal edict into flesh…they may succeed, with hybrid SMARTs; or they may fail and collapse or just focus on international sales.

What this WILL do…is add COST. An industry down on its capital, with the economy in a never-ending “recession”…simply cannot AFFORD such a cost.

My prediction: Ford will bring out a teeny-tiny little hybrid, give it to the dealers to avoid franchise violations…and focus on other markets. And contract, or sell itself to another company. Fiat will let Chrysler wither on the vine, as they, too, focus on more rational markets.

GM…will go through another round as a public ward, or will collapse. It’s insolvent now, when using honest bookkeeping.

America will experience a time as Cuba writ large…no car worth owning will be available here; or available for an affordable price. Even AFTER the bullheaded bureaucrats realize their mistake or are overrulled in Congress…manufacturers will be leery of tooling up for new models that can be outlawed at the whim of one dull-normal politician and his hacks.

Political instability…has real-world costs. It’s why the motor industry matured HERE and not in Argentina or Costa Rica. And it’s why it will no longer thrive where it once found a home.

@JustPassinThru- I agree with your perspective that these CAFE requirements will drive greater costs into a capital constrained auto industry which is still struggling with a depressed market here. They really are about limiting choice as well.

I do not understand why you think GM is insolvent, and how their bookkeeping is not honest. They have very little debt and are making a lot of money. They clearly have the best balance sheet, by far, of any of the U.S. makers. You may not like the politics of how they got there, but those are the facts in the real world today.

I don’t have the details in front of me…but I recall they were accused of using dishonest accounting in claiming they’d paid back their bailout money and were turning a profit. Some of the bailout monies paid to them were not in their accounting; and some legacy costs left off.

The specifics don’t matter. It’s no longer a business; it’s a POLITICAL operation. Which means honesty is the first casualty.

No business mindful of the bottom line would have ever brought out a product like the Volt.

Fiat bread and butter is making small cars. If they can’t live with CAFE II than a Toyota Prius can’t live with it. Besides Europe has something akin to CAFE. It is CO2 per km so it shouldn’t be to hard to compare it with CAFE but my bet is that it is lot thougher

America had become third world country where laws are changed in daily basis and future is unpredictable, no long term planning is possible, many subjects are above the law, politicians dictate their will to businesses, businesses close to government are prospering despite losing money, special interests control government, registering new company is next to impossible. And majority of population came from third world countries anyway so all it to be expected.

No doubt. Anyone has to be crazy to attempt to start a new business. I’m not in HR but I recently went to a discussion for HR professionals on employees and that healthcare “reform”, and who wants to bother hiring anyone, let alone get involved in anyone tied to unions? And continuing to build cars in the USA let alone anything else? Good luck with all the regulations, and as said can’t plan for the future as it may be outlawed, simply taxed out of the market, or not enough people can afford to buy it unless it’s with food stamps.

However the good news is that a new McDonalds just opened near me and was hiring 24 employees!

Ha. They’ll be serving apples with Happy Meals, with safe, soft gender-neutral toys made of biodegradable non-pulp material…with a recovery string in case the rug-rat swallows it out of boredom.

Which means, those 24 people will soon be ex-McDonalds employees, along with their boss. And tens of thousands more. As McDonalds discovers that pleasing government and satisfying customers are not related and have become mutually exclusionary.

Is Whole Foods nearby? That’s a business that’s been officially blessed…maybe they can take former Mickey Dee people as tofu chefs…

“McDonalds customers are the mums and dads of those happy meal eating rugrats and they like it when their kids eat health. Adding some apple parts and some parents will start to believe it is health.”

Sure. That’s why they took them to McDonalds.

There is zero evidence to support your assertion and plenty of evidence to the contrary. Know why McD no longer offers salads? Because they didn’t sell…people who want to eat salads or feed their kids apples, go elsewhere.

Your concern for children is admirable; but it’s not your business – or government’s.

There are no loopholes in CAFE or the tax code.
These are legal provisions that were discussed, passed and signed into law.

When people use the term ‘loophole’ they are disparaging wholly legal terms they simply don’t like and so pretend those specific regulations are some kind of fluke.

Test Your Compromise Quotient.
Think of an issue really important to you. Be it free speech, voting rights, child labor, abortion, etc.
How willing are you to compromise? Willing to be ‘fair minded’ and give up half of what you believe for 50/50 ‘shared sacrifice’?

I suggest everyone in America buying and reading Ayn Rand’s “Atlas Shrugged”. Obama government is the worst government Americans were capable of coming up with and in exactly the wrong place and time in the history. American government is digging the hole so big it will be impossible to get out of it without defaulting on the government obligations and substantially lowering standards of living for Americans and probably rest of the world. It comes from someone who survived several sovereign defaults and knows what he is talking about. And make no mistake about it – high level government bureaucrats will benefit most out of it.

I assume that the car companies must have out negotiated the regulators and received some low-cost way of meeting the new regulations without actually making 50 mpg cars. Maybe the definition of “work truck” can be stretched to exempt most high-profit pickup trucks and E-85 capable flex-fuel cars get their fuel economy calculated using large doses of green energy fiction.

Why don’t you start a “We want gas taxed to $10 a gallon so GM will start making those 100-mpg carburetors” thread.

You’re a fan of government micromanagement? Fine…you have lots of company. But you’re going to be enthusiastic from the window of a mass-transit vehicle…enthusiasm for automobiles and enthusiasm for government are mutually exclusive.